Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Brown & Brown Q4 revenue rises 13.8%

Reprints
Q4

Brown & Brown Inc. on Monday reported 2019 fourth quarter revenue of $579.0 million, up 13.8% from the same quarter in 2018 as commissions and fees grew sharply with acquisitions.

Commissions and fees increased 13.6% in the fourth quarter to $577.0 million, and quarterly organic revenue grew 5.2%, according to the brokerage’s earnings statement released Monday.

Fourth quarter net income was $76.5 million, up 4.1% from the same quarter in 2018, the statement said.

Revenue for the 12 months ended Dec. 31, 2019, was $2.39 billion, up 18.8% from 2018.

Commissions and fees totaled $2.38 billion, up 18.6%, and organic revenue increased by 3.6% to $2.004 billion.

Full-year 2019 net income was $398.5 million, up 15.7% from 2018.

The brokerage acquired five businesses during the fourth quarter with annualized revenue of approximately $19 million, J. Powell Brown, president and CEO, said Tuesday morning on an earnings call with analysts.

For the full year, there were 23 transactions with approximately $105 million in annualized revenue, he said.

Brown & Brown’s retail segment saw fourth quarter organic revenue growth of 7% on rate improvement and full-year organic growth of 4.7%, Mr. Brown said.

The national programs unit saw organic revenue of 10.7% for the quarter, but full-year organic growth of 3% was blunted by a one-time charge of $8 million in the segment related to the lenders program, Mr. Brown said.

The wholesale brokerage unit saw 7.9% organic growth in the quarter on increasing rates and 7.4% organic growth for the year, he said.

The services unit had a fourth quarter organic loss of 19.4% as one contract ended and overall claims activity was lower, Mr. Brown said, and the unit had organic growth of 6.3% for the year.

Premium rates continued to increase during the quarter, but the broker does not see a broad-based hard market, Mr. Brown said. “Risk bearers are seeking rate increases and they are sticking in certain areas and not sticking in others,” he said.

“In general, there is a continued upward trend for most lines,” with increase amounts driven by loss experience and certain classes of business. Lines with “notable” increases included transportation, habitational, coastal properties and excess liability.

Commercial auto remains the one line of coverage that has consistently realized 5% to 10% rate increases across almost all carriers, Mr. Brown said, while workers compensation remains down 2% to 5% in most states.

Most professional lines for private companies were flat to down 10% while public company directors & officers and errors & omissions coverage was typically up 5% to 10%.

In casualty, the “adverse loss development” being seen across the industry “is prompting carriers to review the adequacy of their pricing,” Mr. Brown said.

He added that such market conditions should persist, saying the broker “does not think these conditions will abate for at least the first half of 2020.”

Mr. Brown said, “We anticipate premium rates will continue to increase slightly during at least the first half of 2020,” adding Brown & Brown sees “a firming of rate for many lines and not a hard market,” which is leading insurers to “constrain capital and pull out of lines and geographies entirely.”

He also spoke on the increasing importance of technology and the use of data, saying, “We firmly believe these will have a material impact on the delivery of insurance over the coming years,” adding that he was “not saying that technology will displace the importance of a customer talking with their broker.”

 

 

 

 

 

 

 

 

 

 

 

 

 

Read Next